EDITORIAL: Finance Minister Dr Hafeez Sheikh sure found himself in a bit of a tight spot in Karachi the other day as he tried to explain to a group of journalists that controlling high prices of essential items was the Pakistan Tehreek-e-Insaf (PTI) government’s “first priority”. The minister was doing the rounds, with his predecessor and now Planning Minister Asad Umar, and meeting MNAs and MPAs from Karachi and Hyderabad ahead of the Senate election; lest they felt overlooked after he was rumoured to have met their colleagues in Punjab in the company of long-time party benefactor Jahangir Tareen.
Things were going pretty well till he was talking about the deficit, reserves, exports and other things that have improved since the PTI government came to power. But, try as he might, he wasn’t able to impress anybody when it came to the matter of high prices, especially in items of necessary use with inelastic demand. So he took the easy way out and implied that now that so much had been put right, prices would be the next “first priority,” even if such a policy – if at all it can be called that – would contradict very strongly what the prime minister has been saying about it for so long.
After holding all sorts of things responsible for the “artificial price hike,” like hoarders, mafia, etc., and ordering all sorts of inquiries, and then promising to use “all the might of the state” to catch and punish everybody responsible for it, the PM hasn’t yet brought the people any closer to a more affordable daily life. Perhaps the biggest problem is that this administration is relying on purely an administrative approach to get the job done. That explains recent steps like dissolving provincial price committees in Punjab and KP, where PTI is in government, and ordering new bodies that will be headed by “honest and clean people.”
Surely, the finance minister shouldn’t need any reminding, even if the prime minister might, that it takes more than personal integrity of somebody in a price committee to balance demand and supply forces in the marketplace. And no matter how committed the administration has to be to a seemingly free market at least, in keeping with IMF demands of course, it can still not escape the responsibility of protecting supply chains of the most essential commodities. The state must, in other words, become the visible hand that balances the market when inflation is not demand-driven but cost-pushed, especially when the cost is jacked up because of artificial supply shortages that result from clear violation of the law.
Even if this “artificial inflation” has suddenly really become the government’s “first priority,” and the PM has yet to use “all the might of the state” to sort it out, no plan or policy is going to get anywhere unless the hoarders and the mafia are first put in their place. There’s no denying that in many ways the economy is stronger now than it was a while ago and reserves are finally in the green; even though that is more because of remittances than exports. But even initiatives like the Ehsaas Emergency Cash Programme, which kept those at the very bottom of the food chain alive during the worst of the lockdown, will miss their targets if the most vulnerable sections of society are unable to afford their food for no reason at all.
The finance minister will not be able to kick this particular can down the road for much longer. People have been living with this problem for far too long and reports that ruling party MNAs and MPAs don’t hear the end of it when they visit their constituencies have started reaching the press. The government must, therefore, shift gears immediately and get the “might of the state” to work on hoarders and thieves that rob its people before it’s too late. Such issues have, after all, been known to resonate very loudly at the polls. And it’s not as if there’s too much time left in the present electoral cycle.
Copyright Business Recorder, 2021